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When does my hobby become a business?
david161
Posts: 5 Forumite
in Cutting tax
I work full time in catering services and pay tax and NI via PAYE. During the past 5 years i been buying antique cups for my own enjoyment i sold a few at a profit to buy new ones is this a hobby or business?
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Comments
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I'd be tempted to say neither, but bypassing sarcasm for a moment, it probably depends how many "a few" is, and how much profit was made.
The rules are probably similar to the rules regarding ebay sellers being individuals or professional/business sellers.They say it's genetic, they say he can't help it, they say you can catch it - but sometimes you're born with it0 -
Yes, there are many (I think 6 off hand) tests which are applied. Some of these are:
How long they are held for
The quantity (as mentioned)
The motive
Can't remember the rest off the top of my head but maybe someone else can help out?Northern Ireland club member No 382 :j0 -
If you buy a cup with express intention of selling it on hopefully for a profit, clearly a business. If you buy a cup and enjoy looking at it for a few months, but then see another one you like better so sell first to fund purchase of second then that is not a business. I think you would have to be selling 100s a year or making incredible profit for HMRC to even think about taking an interest.If you are querying your Council Tax band would you please state whether you are in England, Scotland or Wales0
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They tests are called the badges of trade -google this as I don't know if I can link to other articles.
I seem to remember that one of the leading cases dealt with the purchase of a large number of toilet rolls!I can spell - but I can't type0 -
devils_advocate wrote: »I seem to remember that one of the leading cases dealt with the purchase of a large number of toilet rolls!
If you use those for a while .... before selling them on .... you're unlikely to turn much of a profit!
If you want to test the depth of the water .........don't use both feet !0 -
devils_advocate wrote: »They tests are called the badges of trade -google this as I don't know if I can link to other articles.
I seem to remember that one of the leading cases dealt with the purchase of a large number of toilet rolls!
I couldn't get that case out of my head when I typed my 1st post! He went to court to argue that the purchase of 1 million toilet rolls was for pleasure, not a business! :rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:
He would've had a problem if he really thought that!:eek::eek:Northern Ireland club member No 382 :j0 -
Definitely a hobby ...0
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